You didn't mention the condition of the rest of the car. With all due respect to Chuck, if it is in nice shape other than the motor, I would suggest it is worth a fair bit more than $3,500 once repaired. More like $8500 minimum that nice drivers are going for on the East Coast.

P.S. Almost all cars with high miles consume large $$, but so do the payments on new ones, not to mention brutal depreciation!! If you enjoy owning/driving "Buttercup", fix'er up and be happy.